🌅 Private Equity Increases Hospital Deaths

SOURCE

Kannan et al. (2025)

WHAT TO KNOW

• Emergency department deaths increase by 13% after a hospital is acquired by private equity, amounting to roughly seven additional deaths per 100,000 visits. The new study by researchers at Harvard Medical School, the University of Pittsburgh, and the University of Chicago also found private equity hospitals pay smaller salaries and have fewer staff, compromising patient outcomes.

WHY IT MATTERS

• The study is the latest to add to the mounting body of peer-reviewed evidence suggesting private equity’s increasing presence in healthcare is harming patients. A 2023 study conducted by the same authors found patients are more likely to fall, get a new infection, or experience other forms of harm in a hospital after it’s acquired by private equity.

CONNECT THE DOTS

• Private equity is often confused with venture capital. Without getting lost in the weeds, venture firms invest money in companies—usually startups—in exchange for an ownership stake and future payouts. The success of the investment is tied directly to the success of the company. Private equity, on the other hand, uses leveraged buyouts to acquire ownership of a mature entity using cash and debt. The private equity fund then straps the debt to the acquired company and looks for other ways to increase value through operational improvements, cost-cutting, or financial engineering, all the while collecting a management fee for “running” the entity. In that way, the fund never incurs a risk of loss beyond their initial money investment and continually pays itself fees, causing most funds to focus on short-term value extraction rather than long-term success.